So when do we all start accepting that high inflation isn’t a thing any more?
So when do we all start accepting that high inflation isn’t a thing any more?
Rice University marketing professor Utpal Dholakia recently bought a new Toyota Prius. It was about 20% more than the Prius he bought a few years back, but he put a lot more effort into that transaction.
“I would really do the research, I would find the best price, I would negotiate,” he said.
This time around Dholakia knew cars had gotten really expensive over the past three years, so he says he just kind of accepted the higher price point.
He says inflation, “makes us more tolerant to higher prices and more tolerant to the fact that I’m not going to get a good deal.”
Of course just how tolerant you are to higher prices depends a lot on how much money you make.
Andy Manthei at the nonprofit GreenPath Financial Wellness works with low-income clients to develop responsible budgets.
He says when dealing with the stress of higher food and gas prices, letting go of items like streaming services or lattes can actually be harder when prices are rising.
“In some ways, our brain kind of says well, I need this these endorphins and I need some of this feel good stuff. So I’m gonna go and get a Starbucks coffee because it makes me feel normal,” he said.
Marketing departments are well aware of this kind of consumer inflation resignation, says Ted Klontz, a professor of financial psychology at Creighton University.
“I don’t see inflation, really, in terms of a tool being any different than a two for one, or you know, expires tonight kind of sale,” he said.
But with inflation coming back down, businesses can’t keep hiking prices and blaming macroeconomic forces beyond their control, right?
“You’re not going to see any dramatic changes in the pricing strategies of companies, even with consumer outrage,” said Dholakia at Rice University.
Well, if they’re not going to stop using inflation as an excuse, I’m not going to stop either. That gym membership I was going to buy to get in shape next year? Forget it, too expensive.
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